Independent Standard-Setting Boards

The International Auditing and Assurance Standards Board sets high-quality international standards for auditing, assurance, and quality control that strengthen public confidence in the global profession.

The International Accounting Education Standards Board establishes standards, in the area of professional accounting education, that prescribe technical competence and professional skills, values, ethics, and attitudes.

The International Public Sector Accounting Standards Board develops standards, guidance, and resources for use by public sector entities around the world for preparation of general purpose financial statements.

Mongolian Institute of Certified Public Accountants

Member | Established: 1996 | Member since 2012

The MonICPA was established in 1996 to represent Certified Public Accountants (CPA). The Law on Accounting establishes the responsibilities of MonICPA, which include implementing initial and continuing professional development requirements for CPAs; establishing ethical requirements for its members; translating and contributing to the adoption and implementation of international accounting and auditing standards; providing guidelines and materials to support the audit firms; and revoking the CPA credentials of auditors who breach the MonICPA Code of Ethics and applicable auditing standards. MonICPA also operates an investigative and disciplinary system for its members and its procedures is outlined within the institute’s Code of Ethics. In addition to being a member of IFAC, the MonICPA is a member of the Confederation of Asian and Pacific Accountants.

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Statements of Membership Obligations (SMOs)

The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.

Status of Fulfillment

Although the MonICPA has no legal responsibility for implementing a quality assurance (QA) review system, the institute reports that it supports the implementation of quality control standards and the QA review system...

Although the MonICPA has no legal responsibility for implementing a quality assurance (QA) review system, the institute reports that it supports the implementation of quality control standards and the QA review system established by the Ministry of Finance (MoF), which, according to MonICPA, is developed in line with the requirements of SMO 1.

As part of the efforts to support and promote the adoption and implementation of a QA system, MonICPA developed a voluntary QA system for all its members. The institute established an Audit Quality Review Team under its Audit Quality Sub-Committee to develop implementation guidelines and published documents to support audit firms and its members with the establishment of internal quality control systems. In addition the MonICPA prepared an Audit Quality Review Questionnaire to provide guidance to the quality assurance review team.

To assist the work of the other stakeholders involved in QA reviews in the jurisdiction, the MonICPA reports that it translates quality control standards and has signed a memorandum of understanding with the National Audit Office and the Financial Regulatory Commission (FRC) to provide training activities for audit firms performing audits of companies under their supervision. Additionally, it states it is participating in a panel with the MoF, the FRC, and the Bank of Mongolia to review the audits of financial statements prepared by insurance companies and non-banking financial institutions.

To support its members’ understanding of the requirements and implementation of quality control standards, the MonICPA states that it has developed training activities and workshops for its members who conduct audits and published an annual Audit Quality Review Report which highlights the QA reviews’ findings and common areas of concerns.

Under the Law of Mongolia on Accounting, the MonICPA shares responsibility for the implementation of initial professional development requirements for CPAs, with the Ministry of Finance, Ministry of Education, and local...

Under the Law of Mongolia on Accounting, the MonICPA shares responsibility for the implementation of initial professional development requirements for CPAs, with the Ministry of Finance, Ministry of Education, and local universities. In addition, the institute has also established continuing professional development (CPD) requirements for CPAs. Overall, the extent of alignment of educational requirements in Mongolia with those of the IES has not been reported.

As part of the institute’s efforts to support the incorporation of the IES requirements at the jurisdiction level, the MonICPA has adopted mandatory CPD requirements for its members and translated the IES into Mongolian in 2011.

Under the Law on Accounting, the institute is responsible for providing exam preparation courses and to this end the institute has established a Training Committee that has worked to update national textbooks for CPAs and develop a computer-based exam software to support candidates.

The MonICPA reports that it participates in the National Board of Unified Curriculum in order to promote the alignment of the professional curricula with the IES requirements.

The institute is encouraged to conduct a review of the national requirements against those of the IES, and indicate if the requirements are aligned. If gaps exist, the institute should develop a strategic plan within its SMO Action Plan with defined timelines to demonstrate how it is working to adopt the standards, and incorporate and promote the new standards with national regulators and stakeholders. To this effect, translating the most recent version of IES and raising awareness about their requirements, is recommended. MonICPA could consider participating in the international standard-setting process by providing comments on exposure drafts and other IAESB pronouncements.

Auditing standards in Mongolia are set in the Law of Mongolia on Auditing. Under the same law, the MonICPA is responsible for contributing to the adoption and implementation of the auditing standards by providing...

Auditing standards in Mongolia are set in the Law of Mongolia on Auditing. Under the same law, the MonICPA is responsible for contributing to the adoption and implementation of the auditing standards by providing translations of the standards to the Ministry of Finance—the entity responsible for reviewing and approving translations of the standards and implementation guidance—and developing guidelines and material for CPAs and audit firms.

As reported by MonICPA, the 2013 version of ISA is being applied in the jurisdiction. The MonICPA reports that it has translated the latest ISA that are effective 2016 and submitted the translation to the Accounting and Auditing Standards Committee (AASC) for review. The institute anticipates that the process will be completed by September 2017.

In order to assist its members with the implementation of the auditing standards, the MonICPA reports that it has developed two manuals: i) Application of ISA; and ii) the Policies and Procedures and Financial Audit. Moreover, it also states it has organized training activities for its members and disseminated new and amended standards through its various communications channels.

The MonICPA reports that in order to establish oversight of audits that are mandated by the National Audit Office, the institute has signed a Memorandum of Understanding (MoU) with the Financial Regulatory Commission (FRC) and the Bank of Mongolia to review the quality of audit works on entities regulated by the respect institutions. As part of the MoU, the institute reports that it promotes new and revised standards to the FRC and conducts training on the standards.

Furthermore, the institute notes it is active in promoting updates to the existing Law on Auditing, such as clarifying the definition and criteria of companies that are required to have audited financial statements and specifying services provided by audit firms. However, the institute has not indicated an anticpated timeline for this project.

The MonICPA is encouraged to consider developing implementation support activities for its members on the new ISA, once the AASC has approved the translations. The MonICPA is also encouraged to consider participating in the international standard-setting process by providing comments on exposure drafts and other IAASB pronouncements.

The MonICPA is responsible for setting ethical requirements for Certified Public Accountants (CPAs), and reports that in 2012, its general assembly approved a Code of Ethics that is consistent with the IESBA Code of...

The MonICPA is responsible for setting ethical requirements for Certified Public Accountants (CPAs), and reports that in 2012, its general assembly approved a Code of Ethics that is consistent with the IESBA Code of Ethics; however, the version of the IESBA Code adopted has not been indicated.

The MonICPA indicates that it promotes the Code of Ethics to relevant stakeholders through a variety of awareness raising activities. These include: coordinating visits to universities to promote the IESBA Code of Ethics; promoting the inclusion of ethical courses in the professional curricula to the Ministry of Education and universities; developing a manual on its Code of Ethics for all accounting students and candidates for the CPA exam; and including ethical content in the pre-CPA examination.

The MonICPA is encouraged to review the latest IESBA Code of Ethics for adoption. The institute is also encouraged to review and make relevant authorities aware of the new NOCLAR standard, effective July 2017, in order to incorporate the new standard and establish implementation support activities around NOCLAR. The MonICPA is encouraged to collaborate with other stakeholders involved in the regulation of Professional Accountants in the jurisdiction, such as other professional accountancy organizations as well as the regulators, to promote the adoption of the IESBA Code of Ethics for the overall profession.

The MonICPA is encouraged to consider including plans in its SMO Action Plan related to the incorporation of ethics in the training courses and its continuing professional development program as well as the ways in which the institute raises its members’ awareness of international developments to the IESBA Code. The institute is also encouraged to consider plans to participate in the international standard-setting process by providing comments on exposure drafts and other IESBA pronouncements.

The MonICPA is not responsible for setting public sector accounting standards but it reports that it supports the adoption of IPSAS by contributing to the translation of IPSAS for the Ministry of Finance (MoF)—the...

The MonICPA is not responsible for setting public sector accounting standards but it reports that it supports the adoption of IPSAS by contributing to the translation of IPSAS for the Ministry of Finance (MoF)—the entity responsible for the implementation of public sector accounting standards in Mongolia.

The MonICPA reports that it provides assistance to the MoF in translating IPSAS and other standards; however, it is unclear if the institute has translated the most recent version of the standard.

The institute reports that along with the MoF, all budget entities in the country who are required to apply IPSAS are provided a copies of the Handbook of International Public Sector Accounting Pronouncements as issued by the IPSASB, and that it has developed guidelines and training activities for public sector accountants in the jurisdiction. The institute reports that material on IPSAS is included in its initial and continuing professional development programs.

In the next update of its SMO Action Plan, the MonICPA is encouraged to provide clarifying information on the most recent version of IPSAS the institute has translated into Mongolian. The MonICPA is further encouraged to collaborate with the MoF to make up-to-date translations of IPSAS and other pronouncements issued by IPSASB available to relevant entities. In its next SMO Action Plan submission, the MonICPA is encouraged to provide specific examples of planned activities, such as trainings and workshops, to support its members with the implementation of the currently applicable public sector accounting standards. In addition, MonICPA is encouraged to participate in the international standard-setting process by providing comments on exposure drafts and other IPSASB pronouncements.

The Law of Mongolia on Accounting of 1993, as amended in 2015, outlines the penalties that can be imposed on Certified Public Accountants that breach the Code of Ethics adopted MonICPA. The MonICPA’s investigative and...

The Law of Mongolia on Accounting of 1993, as amended in 2015, outlines the penalties that can be imposed on Certified Public Accountants that breach the Code of Ethics adopted MonICPA. The MonICPA’s investigative and disciplinary (I&D) system and procedure is outlined within the institute’s Code of Ethics and is performed under the oversight of the Ministry of Finance.

As reported by MonICPA, its Ethics Committee has developed procedures related to I&D titled “Rules for Receipt of Complaints and Information Related to Ethical Cases, Investigation, Discussion and Decision.” The MonICPA reports that it reviewed the requirements of SMO 6, when it was revised in 2012, and had identified gaps in its appeals process; however, no information has been provided on the identified gaps. The MonICPA reports that in 2017, its Ethics Committee will review SMO 6 to incorporate the revised requirements and address the gaps that were previously identified.

The MonICPA states that it has developed processes for receipt of claims and complaints, and raises the public’s awareness of its I&D system through its website and other institutional communications channels, such as its newspaper and quarterly journal.

The MonICPA is encouraged to report in its next SMO Action Plan update on its efforts to address the gaps in its I&D system and indicate if the system is aligned with the requirements of SMO 6. It is recommended that the MonICPA consider promoting the adoption of an I&D system that is in line with SMO 6 requirements to regulators and professional accountancy organizations that are involved in the I&D of Professional Accountants with the objective of ensuring full compliance at the jurisdictional level.

Although the accounting standards in Mongolia are set by law, the MonICPA actively participates and contributes to the standard-setting process by providing translations and encourages the application of IFRS. MonICPA...

Although the accounting standards in Mongolia are set by law, the MonICPA actively participates and contributes to the standard-setting process by providing translations and encourages the application of IFRS. MonICPA reports that the most updated version of IFRS is the 2011 version, with the latest version of IFRS under review as of June 2017.

Under the Law on Accounting, the MonICPA is responsible for providing translations of the standards to the Ministry of Finance (MoF) and developing implementation guidance and materials. In line with this, the MonICPA participates in a working group established by the MoF which is responsible for developing a new template for preparing and presenting separate financial statements in accordance with IFRS.

As part of its translation activities, the MonICPA states it has developed processes to provide translations of the latest IFRS updates and has used translation software—SDL-TRADOS—since February 2013 and in 2014, and created a translation database.

Furthermore, the MonICPA has submitted a proposal to amend the Law on Accounting to define the size of entities and establish clear accounting standards for each group. The institute reports that this effort is still ongoing.

To support its members with the implementation of accounting standards, the MonICPA has incorporated standard-related topics into its various initial and continuous professional development programs, and provides additional training through workshops, international conferences, and online video training. In addition, the institute developed guidelines on interpreting the changes to IFRS in 2010.

Lastly, the MonICPA notes that it raises awareness of new and revised standards by distributing information through its website and other institutional communications channels.

The MonICPA is encouraged to provide updates in the next update of its SMO Action Plan on the status of its initiative to propose an amendment to the Law on Accounting. In addition, MonICPA is encouraged to consider participating in the international standard-setting process by providing comments on exposure drafts and other IASB pronouncements.

Current Status: Execute

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